GLASGOW – Weir Group has entered into a binding agreement to acquire ESCO Corp. (“ESCO”), a U.S. company based in Portland, Ore., for an equity value of US$1.1 billion and an estimated enterprise value of US$1.29 billion. ESCO is the global market leader in highly engineered ground engaging tools (GET) for surface mining and construction.
ESCO is a global business with 10 manufacturing facilities, six foundries and 22 service and supply centres in 19 countries around the world, with its core strength in North America, representing 52% of its revenue. This compares with Weir’s unrivalled global minerals equipment service network, with approximately 100 service centres delivering a presence close to every major mine site in the world. Operating in more than 42 countries covering all key regions, just 22% of Weir Minerals revenue comes from North America.
Leveraging Weir’s global network will significantly increase the number of direct customer relationships available to ESCO. The ESCO business will also provide strong support for Weir’s growing comminution offering, with an extensive footprint and dealer network in North America representing a clear opportunity for Weir’s crusher portfolio.
ESCO will accelerate Weir’s portfolio development through the expansion of Weir Minerals aftermarket opportunities. The business designs, and manufactures highly engineered GET used primarily in surface mining, with one-third of ESCO revenues from construction.
ESCO’s customers include the leading global mining companies with ESCO product installed on approximately 40% of large primary mover machines. ESCO GET typically last significantly longer than rival products and are easier to maintain and replace. The innovative Nemisys lip system and Ultralok mining tooth system are more reliable, improve wear life and reduce downtime.
The acquisition has been approved by the Weir board of directors and is not subject to Weir shareholder approval. The transaction is expected to complete in early Q3 2018.
Visit www.EscoCorp.com to explore the full range of GET products.